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Korean giants launch new smartphone in slowing market

Mon, Feb 22, 2016 - 6:36 AM

South Korean tech giants Samsung Electronics and LG showed off their new flagship smartphones on Sunday as they fight for consumer affections with new features at a time of slowing global smartphone sales.

PHOTO: REUTERS

[BARCELONA] South Korean tech giants Samsung Electronics and LG showed off their new flagship smartphones on Sunday as they fight for consumer affections with new features at a time of slowing global smartphone sales.

Samsung launched two versions of its new premium phone, flat screen Galaxy S7 and the curved screen Galaxy S7 edge, in Barcelona where the industry is gathered for the start of the Mobile World Congress on Monday, in its latest attempt to remain ahead of Apple.

While the new models included a better battery and a card slot to expand memory for pictures and other media, analysts said the upgrades may not be enough to revive sales.

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Rival South Korean tech firm LG sought to steal Samsung's thunder by unveiling its new premium handset, the G5, its first modular smartphone which is made using different components that can be independently or replaced such as a removable battery.

The G5 comes with several accessories such as a sound system developed by Danish firm Bang & Olufsen and a virtal reality headset which will allow it to compete with a the headset launched by Samsung late last year, the Gear VR.

"With its modular design, to change batteries and add accessories, LG's new flagship smartphone is renewing LG's portfolio and a smart attempt to challenge its eternal Korean rival," said Forrester analyst Thomas Husson.

The product launches at this year's congress come as the industry finds itself in an uncomfortable position: Samsung was only able to boost its market share moderately and Apple saw iPhone sales fall for the first time on an annual basis in the final quarter of last year, according to Gartner.

The market research firm said that the 9.7 per cent increase in smartphone sales in the final quarter of last year over the same period in 2014 takes the industry all the way back to 2008 when the global economy was in crisis.

LG's parent company LG Electronics' net profit halved last year on the back of a global economic slowdown and increased competition in the mobile sector but LG CEO Juno Cho remained optimistic.

"We think smartphones' best days are still ahead," he said at the presentation of the new phone.

Analysts said handset makers face a tough choice. Focus on the low-price segment, where sales volumes are large but margins become thin. Or focus on features which can differentiate their phones.

"We are moving towards a logic of segmentation and improvement, with a better camera or more autonomy for example, maybe some advances in virtual reality, but there will unlikely be any major innovation," said Thomas Husson, an anlyst at Forrester.

Chinese electronics giant surprised by unveiling its first personal computer, a convertible tablet that will compete with Apple's iPad Pro, instead of a new flagship phone.

While Apple will not be present at Barcelona, as usual, it is likely nevertheless to dominate discussion given the company is in the limelight over the tricky industry questions of encryption and client confidentiality.

Apple is challenging a court order to unlock an iPhone used by one of the San Bernardino killers, putting the interests of client privacy ahead of helping US authorities investigate a deadly domestic terrorism case.

Since whistleblower Edward Snowden revealed in 2013 the extent of secret US surveillance of phone and Internet communications the technology industry has been walking a high wire between protecting the privacy of uses and the demands of authorities to be able to trace communications.

The Mobile World Congress will also be another opportunity for European telecom companies to size up one another amid continuing consolidation in the region, while the annual gathering is always a frenzy of product launches and a hunt for the next feature or application that will drive sales.

Facebook Mark Zuckerberg will be one of the top speakers, for the third year in a row. He will speak on Monday.